Land property rights and rural enterprise growth: Evidence from land titling reform in China

We exploit a large-scale land titling reform in China that clearly entitles rural households to land rights by issuing uniform land use certificates and study how this impacted entrepreneurship in rural areas. We find that the reform significantly increases business creation in rural areas without decreasing the quality of new entrants or incumbent businesses. It also spurs entrepreneurship among professional and large farmers and attracts more urban residents to start new businesses in rural areas. Additional analysis provides evidence that increased land and labor availability and productivity, and improved social trust may serve as the mechanisms underlying these effects. Altogether, these results reveal that well-defined land property rights have enabled more enterprise growth in rural areas.

Automated summary

Research findings indicate that the large-scale land titling reform in China has increased entrepreneurship opportunities and the number of new businesses in rural areas, without compromising their quality. The reform has also stimulated entrepreneurship among professional and large farmers and attracted urban residents to start new ventures in rural areas. The mechanisms behind these effects include increased land and labor availability, enhanced productivity, and improved social trust.